Illinois Power settles for $500 million in 'Clean Air' case

Steve Gonzalez Mar. 7, 2005, 11:21am

Illinois Power Co. will install $500 million in pollution controls at five coal-fired power plants and pay a $9 million fine to settle a federal lawsuit alleging Clean Air Act violations.

In the largest civil penalty involving a power plant emissions case, Illinois Power settled with the Department of Justice, Environmental Protection Agency and state of Illinois in federal district court in East St. Louis today, March 7.

The settlement resolves a lawsuit filed in 1999 as part of a federal government initiative to bring operators of coal-fired power plants into full compliance with the "New Source Review" provisions of the Clean Air Act.

The agreement will reduce emissions of harmful sulfur dioxide (SO2) and nitrogen oxides (NOx) from Illinois coal-fired power plants by 54,000 tons each year through the installation of approximately $500 million worth of new pollution control equipment and other measures.

The five plants involved in the settlement are Baldwin Generating Station in Baldwin, Havana Generating Station in Havana, Hennepin Generating Station in Hennepin, Vermilion Generating Station in Oakwood, and Wood River Generating Station in Alton.

In addition, Dynegy Midwest Generation will pay a $9 million civil penalty and spend $15 million in projects to mitigate the harm caused by unlawful emissions.

“The citizens of Illinois could not have asked for a better result concerning our consensual agreement with Illinois Power,” said Thomas L. Sansonetti, assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The Justice Department is confident that this settlement will provide numerous benefits in protecting and improving the quality of air for the people in and around the region.”

“The air pollution reductions from this agreement will result in significantly cleaner air for residents of Illinois and downwind states,” said Thomas V. Skinner, acting Assistant Administrator of EPA's Office of Enforcement and Compliance Assurance. “We are committed to strong regulations and aggressive enforcement to protect public health.”

“Today's settlement is an important step in protecting the rich environmental resources of Southern Illinois for which clean air is an essential foundation,” said U.S. Attorney Ronald J. Tenpas. “The emission reductions it will produce will improve the life and health of our citizens.”

In 1999, the Baldwin Station was one of the largest sources of air pollution in the nation, emitting approximately 245,000 tons of SO2 and 55,000 tons of NOx each year.

After the suit was filed, the company reduced SO2 emissions at the plant by more than 90 percent through conversion to low sulfur coal, and it reduced NOx emissions by 65 percent by installing control equipment.

“This important settlement has the potential to improve air quality in Illinois from the Metro East area to the Chicagoland area,” Illinois Attorney General Lisa Madigan said. “Additionally, the innovative projects included in the agreement will improve our state's environment and enhance its natural heritage.”

Dynegy sold Illinois Power to St. Louis based Ameren in 2004 for $2.3 billion citing the collapse of Enron as the major reason to sell.

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